We don’t expect you to read through a 900-page federal tax bill. You’re busy running a business, hiring staff, managing growth, and staying ahead in a competitive market. So here at Virjee Consulting, we’ve read the new tax law for you.
Here’s the short story: It’s called the One Big Beautiful Bill. It was signed into effect on July 4th and brings several key changes that matter to Texas business owners.
Whether you’re running a franchise, a growing startup, a medical or dental practice, or a multi-location retail business, these changes affect how you deduct expenses, plan for taxes, and structure your next phase of growth.
Here’s what you should know.
The 20 Percent Pass-Through Deduction Is Now Permanent
If your business is a sole proprietorship, S corporation, or partnership, you likely qualify for the Qualified Business Income deduction. This allows you to deduct 20 percent of your business income from your taxable income on your personal tax return. Until now, this benefit was set to expire after 2025.
It is now permanent.
What this means for you: You can continue to plan around this deduction. If you are pulling profits from your business or projecting income a few years ahead, this offers lasting tax savings and more certainty when forecasting.
Bonus Depreciation Is Fully Back
Starting January 20, 2025, you will once again be able to deduct the entire cost of business equipment, vehicles, furniture, and improvements in the year you place them in service. This rule is called 100 percent bonus depreciation.
What this means for you: If you are upgrading kitchen equipment, expanding a clinic, buying work vehicles, or remodeling your office, you can deduct the full cost in the same year rather than spreading it out over time. This helps keep more cash in your business during periods of high spending.
Section 179 Limits Have Increased
Section 179 is another method for deducting capital purchases quickly, often used by small and midsize businesses. Unlike bonus depreciation, Section 179 has a cap on how much you can deduct and limits based on your total investment for the year.
The new law raises those limits and expands access.
What this means for you: If you are spending tens or hundreds of thousands of dollars on software, signage, or leasehold improvements, Section 179 allows you to write it off immediately. This is especially helpful for franchisees opening new units or owners upgrading core systems.
Research and Development Costs Are Now Deductible Again
Until now, businesses had to amortize research and development expenses over five years. That created a delay in tax benefits for startups, innovators, and companies investing in internal systems or technology.
The new law allows domestic R&D costs to be deducted in the same year they occur. It also lets businesses amend previous returns to claim deductions they could not take under the old rule.
What this means for you: If you have spent money developing an app, building a new scheduling system, designing a proprietary process, or working with engineers or developers on internal tools, those costs may qualify. We can help you go back and recapture missed deductions or update your accounting moving forward.
Interest Deductions Are Now Easier to Claim
The previous formula for interest deductions limited how much you could deduct based on your earnings before interest and taxes (EBIT). Starting in 2025, the law will use EBITDA instead, which includes depreciation and amortization.
What this means for you: If you are financing equipment, real estate, or working capital, this update allows you to deduct more of your loan interest. This is especially helpful for businesses expanding through debt or refinancing during growth.
QSBS Just Got More Attractive for Founders and Investors
Qualified Small Business Stock, or QSBS, is a tax incentive that allows business owners or early investors to exclude gains from selling stock in a qualifying business. The new law expands these benefits significantly.
Here’s what changed:
- If you hold stock for at least three years, you can exclude 50 percent of the gain
- If you hold for four years, that increases to 75 percent
- If you hold for five years or more, you can exclude 100 percent
- The total gain exclusion cap is now 15 million dollars
- Companies with assets under 75 million dollars now qualify
What this means for you: If you are raising capital, planning for an eventual exit, or building a multi-location operation that could be sold or recapitalized, this provision protects more of your upside. We are seeing more interest from private equity in healthcare and service-based businesses in Texas, so this can play a key role in long-term planning.
Other Business Provisions Worth Knowing
- The excess business loss limitation is now permanent and will adjust for inflation. This affects how much loss you can deduct if your personal income is high
- Pass-through entity tax (PTET) elections remain available. In states like Texas that allow PTET, this continues to be a strategy to manage the federal cap on state and local tax deductions
- Opportunity Zones will now follow a rolling 10-year designation schedule beginning in 2027. If you are investing in OZ-designated parts of Texas, this makes it easier to time and plan around these incentives
- Employee Retention Credit (ERC) penalties have increased, and the IRS now has six years to audit ERC claims. If you filed for ERC, make sure your documentation is rock solid
What About Personal Tax Changes?
While the focus of this law is on business updates, a few individual tax changes are worth noting:
- The current federal tax brackets and standard deductions are now permanent
- The estate and gift tax exemption increases to 15 million dollars per person and will adjust with inflation
- A new six-thousand-dollar deduction will be available to taxpayers over the age of 65
- The child tax credit will increase to 2,200 dollars per child in 2026
- Temporary deductions will be available from 2025 through 2028 for qualifying tip income, overtime pay, and auto loan interest
- A new child-focused retirement account will allow up to five thousand dollars in annual contributions, plus a one-time one thousand dollar government match for eligible children
- Several clean energy credits will begin phasing out starting in 2026, including incentives for solar panels and electric vehicles
What You Should Do Now
This tax law creates more opportunities for Texas business owners to take control of their planning. Whether you’re opening your second location, investing in upgrades, or preparing for a future sale, these provisions are designed to support growth and investment.
This is a great time to:
- Review your entity structure
- Revisit any postponed equipment purchases
- Look back at prior-year R&D costs
- Plan for debt-funded investments or expansions
- Discuss your long-term exit strategy
If you want to understand how this law impacts your specific situation, we’re here to help.
Our team at Virjee Consulting is ready to walk through your situation, review your past filings, and put the right strategies in place going forward.
Reach out anytime using our 24-hour form. Let’s make the most of what this new law makes possible.
Until next time!
